Chinese Bitcoin exchange focuses on cash transactions to keep cryptocurrency in play
China has been moving to force banks to cut ties with Bitcoin exchanges
By Michael Kan | Published: 10:09, 15 April 2014
Chinese banks may be cutting ties to Bitcoin suppliers, but that isn't stopping a local Bitcoin exchange from making physical cash a way to buy the cryptocurrency.
On Tuesday, BTC China, one of the nation's largest exchanges, took a step to establish its own Bitcoin sellers network with the launch of a new web app, called "Picaso ATM".
By using the app, the exchange's own clients can sell their bitcoins to customers.
BTC China is advocating sellers set their own profit margins and get cash in return. To complete transactions on the app, the sellers must meet face-to-face and input confirmation codes through their smartphones. The bitcoins are then transferred over to the customer's account on BTC China's exchange.
Although the cash approach may seem outdated, China has been moving to ban banks and third-party payment services from dealing in bitcoins. Buying the virtual currency could once be done by wiring funds to an exchange's bank account. But starting this month, certain banks have begun closing the corporate accounts used by several exchanges.
While the ensuing crackdown hasn't affected all, it's put pressure on Bitcoin suppliers to come up with new ways to keep the virtual currency in circulation.
In BTC China's case, the exchange's bank accounts are still in operation, but the company's sees promise in using cash transaction to popularize Bitcoin among Chinese users.
Despite the nation's strict stance on Bitcoin, authorities have said consumers are still free to buy the virtual currency.
"We do want to create a seller network, but we also simply want to help facilitate the ease at which people can acquire Bitcoin," BTC China said in an email.
On Tuesday, the exchange also unveiled what it claimed was the country's first physical ATM Bitcoin machine. It is located in a coffee shop based in Shanghai.